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21 December 2007

Blair urged end to BAE-Saudi corruption investigation

Documents released in the High Court on Friday 21 December 2007 indicate that the SFO's investigation into BAE's Saudi arms deals was dropped only after then Prime Minister Tony Blair sent a 'Personal Minute' on 8 December 2006 to the then Attorney General, Lord Goldsmith, (who superintends the SFO) about the "real and immediate risk of a collapse in UK/Saudi security, intelligence and diplomatic cooperation".

Blair stressed in this 'personal minute' his concern about "the critical difficulty presented to the negotiations over the Typhoon contract", (a further proposed but unsigned deal for the sale of 72 Eurofighter Typhoon aircraft from BAE to Saudi Arabia).

But on 11th December -- only three days before the investigation was dropped – Goldsmith told Blair that halting the investigation on the grounds of Saudi claims to withdraw cooperation "would send a bad message about the credibility of the law in this area, and look like giving in to threats".

Just two months previously, in October 2006, Goldsmith firmly rejected representations made by government departments that the investigation should be dropped because of Saudi representations that they would withdraw intelligence and diplomatic cooperation.

Goldsmith's "firm view" was that "it would not be right to discontinue [the investigation] on the basis that the consequences threatened by the Saudi representatives may result".

The decision made by the Director of the SFO, Robert Wardle, on 14 December 2006 to drop the investigation appears to have been prompted by Blair's personal minute and by meetings in November and December 2006 with the UK Ambassador to Saudi Arabia.

Wardle's witness statement, also released on 21 December 2007, indicates that he repeatedly rejected requests to terminate the SFO investigation. He insisted throughout the investigation that, on balance, "the public interest in investigating possible corruption by a major arms company" was best served by continuing the investigation.

He states that arguments to abandon the investigation were first put forward by the Cabinet Office (the government department supporting the Prime Minister) and the Ministry of Defence -- following representation by BAE Systems in November 2005. BAE's assessment, according to Wardle, of "the risks to the national interest" included commercial risk, the position of Saudi Arabia in the Middle East, and the UK's counter terrorism strategy.

In December 2005, Wardle "considered . . . carefully" representations on security made by the Cabinet Office, which had the support of the Prime Minister, the Foreign Secretary and the Defence Secretary. But he concluded that, although "the possibility that cooperation with the UK might be endangered" was "the most powerful of the representations made on the public interest", he was nonetheless "not convinced that the danger referred to was imminent".

In January 2006, Wardle told the Attorney-General that "the balance of the public interest was in favour of continuing the investigation", and the Attorney-General "concluded that . . . the public interest required the investigation to continue".

But several months later in September 2006 -- when the SFO was seeking Swiss bank account details about irregular payments to Saudi officials -- the Cabinet Office again raised the possibility that Saudi Arabia's cooperation with the UK on counter-terrorism would be prejudiced if the investigation continued -- and again the Serious Fraud Office and Attorney-General rejected the suggestion.

The SFO Director's announcement on 14 December 2006 that he was dropping the investigation appears, therefore, to have been prompted by Tony Blair's 8 December 2006 'personal minute' to the Attorney General and by meetings with the UK Ambassador to Saudi Arabia in November and December.

The government has not released, however, any documents about the Ambassador's representations to Wardle nor about the Saudi representations to the UK government. The released documents -- which are heavily censored -- do not contain any assessment of whether the Saudi threat to withdraw intelligence and diplomatic co-operation was real, credible or even imminent.

The documents were released during a 'Directions Hearing' to prepare for the judicial review at which Lord Justice Moses gave 'directions' to all parties (CAAT, The Corner House and The Director of the Serious Fraud Office) as to how their evidence, grounds and defence should be presented.

The released documents are:

a witness statement from the Director of the Serious Fraud Office, Robert Wardle, and;

nine typed-up letters with many words and sentences omitted (redacted) between the Prime Minister and/or Cabinet Office (the government department supporting the Prime Minister) and the Attorney General (which superintends the Director of the Serious Fraud Office) dating from December 2005 to December 2006.